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What is OEE (Overall Equipment Effectiveness)?

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Learn What is OEE (Overall Equipment Effectiveness), Calculating OEE, How to Implement It, Benefits of Measuring OEE, and Industry Applications for OEE.

Modified on

December 13, 2023

Overall Equipment Effectiveness (OEE) describes the evaluation and improvement of all production elements to maximize efficiency. By gathering and analyzing machine and line data, personnel can better weigh the value and waste of an asset or working asset group to determine an OEE rating. Higher OEE ratings indicate better overall efficiency and capability of a particular production element.

Integrating an OEE strategy into your organization’s manufacturing processes can provide advantages in reducing waste and downtime. OEE software analytics provide invaluable information that can benefit preventive maintenance procedures and decrease the time spent on repairs.

How Does OEE Work?

Overall Equipment Effectiveness (OEE) measures the total asset performance of production elements by measuring key deficiencies, known as the Six Big Losses. The Six Big Losses concept originated during the development of TPM (Total Productive Maintenance). The OEE calculation is a simple OEE formula of three factors: Availability (A) x Performance (P) x Quality (Q) = OEE. 

Availability (A)

Availability measures the actual production time and compares it to the scheduled production time. You calculate availability by dividing the total run hours by the expected run hours. Planned and unplanned stops are two big losses tied to the availability metric.

  • Planned stops

A planned stop is an anticipated halt in production, such as a line changeover or equipment maintenance. Though expected, there is always room to speed up these events and improve the OEE rating.

  • Unplanned stops

These events force a halt in operations, such as equipment failure or operating staff shortages. Unplanned stops can have a significant impact on a plant’s OEE raging. Breakdowns often lead to planned downtime for later maintenance, and staffing shortages might halt production for an entire shift or longer.

Performance (P)

Performance measures equipment performance losses during its run time. You calculate the performance score by dividing the performed throughput by the maximum expected throughput. The two big losses that impact performance are small stops and slow cycles.

  • Small stops

You may need to stop production for a few minutes to correct a misaligned sensor or unblock a hopper feed. Though such tasks take little time to perform, they can add up over the course of a scheduled production run.

  • Slow cycles

Equipment producing more slowly than its ideal cycle time experiences a slow cycle. Slow cycles are often challenging to detect because equipment usually runs so fast that people can’t easily perceive a drop in speed. Sensors, combined with a software solution such as ServiceChannel, can quickly catch reduced speed, no matter how minor.

Quality (Q)

Quality measures the quantity of defect-free units produced against the total units produced by dividing the number of deliverable units produced by the total number of units started. Production rejects and startup rejects are the two big losses that impact a quality score.

  • Production rejects

This measures the quantity of defects produced during steady production. Whether you can rework a reject or it needs to be discarded, all production rejects count against a quality score.

  • Startup rejects

Defective units that are produced from initial line startup until the line reaches stable production count toward startup rejects. Setting changes and changeovers are two excellent examples of circumstances that impact OEE quality metrics.

Implementing OEE in Your Service Management

OEE analysis provides information that can help avoid future issues that reduce performance and cost your company money. By following these steps, your organization can implement successful OEE processes for measuring manufacturing productivity and maximizing your operations.

1. Calculate OEE

Before you’re able to improve your overall equipment effectiveness, you’ll need to determine your OEE score. You calculate your rating by multiplying your availability, performance, and quality scores. For example, you would calculate an availability of 80%, performance of 95%, and quality of 93.8% like this: 0.80 x 0.95 x 0.938, giving a 0.712 or 71.2% OEE score.

2. Start with a pilot implementation

Begin your implementation with a pilot machine. This gives your personnel some experience tracking asset performance and applying the OEE formula to your manufacturing process. To make sure you have the steps down, begin with a piece of equipment you know will handle a heavy workload. This initial effort will make applying OEE easier to subsequent production line equipment. 

3. Assess the current state of equipment

Before implementing OEE, evaluate the current state of all your equipment in your manufacturing process. Knowing the condition of all your assets helps to make a fair determination for baseline expectations. For example, you would expect older manufacturing equipment to operate at a different capacity than when it was new.

4. Automate data integration

A software solution enables you to automate data collection. Quick and accurate information gathering gives you real-time data on several metrics, such as manufacturing time. Top-loss summaries and other reports give your organization a tremendous advantage by improving accuracy and catching the Six Big Losses.

5. Assemble a cross-functional team

Gather a team to implement and maintain OEE processes. Personnel with expertise in maintenance, operations, technology, and data analysis working together to improve equipment effectiveness and efficiency can move your organization closer to a world-class OEE score.

6. Monitor your OEE improvement

As you adjust and improve your manufacturing processes, such as reactive and preventive maintenance times, monitor your OEE metrics and CMMS KPIs (computerized maintenance management system key performance indicators) to track the impact of your efforts.

Benefits of Measuring OEE

Tracking and measuring your OEE score as you progress in your manufacturing processes provides your organization several advantages. As you calculate OEE to adjust your practices to increase availability, reduce defects, and improve production time, these benefits will shine through.

Consistent production volume

OEE technology helps maximize production efficiency and enables you to consistently hit your production targets by providing up-to-the-minute data on total effective equipment performance.

Promotes visibility of processes

Up-to-date visuals reveal performance issues and where they occur. OEE technology alerts personnel of drops in productivity and measures downtime, as well as quality problems through rejection tracking.

Optimize production capacity

By identifying bottlenecks and downtime threats in each manufacturing process, OEE helps pinpoint areas of your production that could improve. Identifying and addressing problem areas lets you improve your overall production capacity and reach your manufacturing process goals.

Reduce waste, scrap, and rework

OEE helps identify quality losses in real-time, making it easier to correct equipment and adjust processes to avoid rejects and scrap. This helps eliminate the waste of materials and time.

Reduce machine maintenance

The equipment performance visibility that OEE provides enables organizations to implement a preventive maintenance program, reducing instances of reactive maintenance and equipment failure.

Improve asset performance

Carrying out OEE measures can help your company pinpoint underperforming assets, enabling you to improve the performance of equipment and machinery.

Applications for OEE

Just about any industry can benefit from Overall Equipment Effectiveness (OEE) measures to work toward continuous improvement of equipment and processes and actual production count efficiency. These industries commonly use OEE as part of their regular production process.


In goods manufacturing, OEE is widely used to improve all processes. They’re better able to hit each real-time production target and optimize equipment performance, ensuring less waste and increased overall productivity.

Food and Beverage

In the food and beverage industry, Overall Equipment Effectiveness procedures can help personnel reduce downtime and hold to planned production time while ensuring product quality and better worker safety.


In pharmaceutical production, OEE helps maintain equipment effectiveness, improve efficiency, and ensure product quality and safety.

Improve Productivity and Asset Performance with ServiceChannel

Service management professionals everywhere leverage OEE (Overall Equipment Effectiveness) processes with confidence. A powerful software solution like ServiceChannel is key for ensuring quicker response times and more accurate data gathering. 

Explore ServiceChannel today and learn how to integrate OEE into your operations.

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